Finnair - Uncertainty extends through spring
Finnair’s Q4’21 losses were a bit lower than estimated, however the company expects the combination of Omicron and certain other operational expenses to lead to somewhat higher losses again in Q1’22. Finnair expects Omicron to postpone the opening of Asia to some extent.
- Q4 revenue grew by 305.5% y/y and amounted to EUR 413.5m, compared to the EUR 451.9m/387.4m Evli/consensus estimates.
- Adjusted EBIT was EUR -65.2m vs the EUR -94.6/-90.1m Evli/consensus estimates.
- Fuel costs were EUR 102m vs our EUR 126m estimate. Staff costs amounted to EUR 84m, compared to our EUR 95m estimate. All other OPEX+D&A amounted to EUR 305m vs our EUR 340m estimate.
- Cost per Available Seat Kilometer was 7.75 eurocents vs our estimate of 8.84 eurocents.
- Finnair sees Q1 losses due to Omicron notable but short-lived and as a result, in addition to increased fuel prices and incremental costs caused by the need to ramp up capacity for summer 2022, expects Q1’22 losses to be of a similar magnitude as in Q1’21 (EUR -143m in terms of EBIT). Finnair reiterates its previous estimate that the losses will continue during the entire H1’22. There’s prolonged uncertainty with respect to the opening of China and Hong Kong, while countries such as Japan and South Korea should open towards the end of Q2’22.
- The EUR 200m cost savings programme’s full run-rate impact will be visible this year.